Minister’s decision on VAT remission

In December 2020, the minister of finance announced a remission of output VAT on the deliveries of COVID-19 vaccines and testing kits. This represents the implementation of an exemption with the right to deduct VAT, which is permitted by the EU VAT Directive.

 Additionally, the minister of finance issued a decision on the remission of interest on VAT arrears with regard to all taxpayers (under additional conditions) whose business activities were/will be prohibited or restricted in the period from 22 October 2020 to 31 March 2021 as a result of the resolution of the Government of the Czech Republic on the adoption of crisis measures, provided that the VAT due will be paid by 16 August 2021. Interest incurred in connection with the delay in VAT payments in the period between 1 January 2021 and 16 August 2021 is also remitted.

Information of the General Financial Directorate on the taxation of rents after 1 January 2021

In December, the General Financial Directorate issued information on the regime of taxation of rents for selected real estate properties in the period from 1 January 2021, i.e. after the amendment came into force, which significantly reduced the possibility to apply VAT. For this purpose, the Directorate defines living space with regard to what is registered in the land and property register. The public did not receive expected comments on the transitional provisions of the amendment; therefore, it remains unclear in which cases the new amendment affects contracts concluded before 2021.